Tuesday, November 3, 2015

Term of the Day: Days Sales Of Inventory - DSI

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November 3, 2015
Days Sales Of Inventory - DSI

The days sales of inventory value, or DSI, is a financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory (including goods that are a work in progress, if applicable) into sales. Generally, a lower (shorter) DSI is preferred, but it is important to note that the average DSI varies from one industry to another.

The term days sales of inventory is also referred to as days inventory outstanding (DIO), days in inventory (DII) or, simply, days inventory.

Breaking It Down:

Days sales of inventory, or days inventory, is one part of the cash conversion cycle, which represents the process of...

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